REGULATORY ORDER NO. R 20-01

SURPLUS LINES PLACEMENT LIST

On November 6, 2019, in accordance with 3 AAC 25.040, the Division of Insurance hearing officer on behalf of the director held a hearing pursuant to Alaska Statute (AS) 21.06.180-21.06.230 to receive testimony concerning the kinds of insurance for which insureds generally are unable to secure coverage from admitted insurers. Written testimony closed at 4:30 p.m. November 14, 2019. Based on this testimony, the director has decided what types of insurance coverage to include on the surplus lines placement list.

Findings of Fact:

1. The director received verbal testimony to add “used automobile dealers” to the placement list. After review of the approved filings in the state, the director finds there are admitted insurers that do offer automobile dealer coverages in the state. The list will not be amended to reflect a change.
2. The director received testimony in writing to amend “cyber liability” applicable to “All lines except workers’ comp” to “General Liability” Codes 17 and 11. The director has determined the applicable lines should be changed to “General Liability” Code 17 only, as code 11 is only for medical professional liability.

Conclusions of Law:

1. Regulation 3 AAC 25.040 requires the director, after a hearing under AS 21.06.180-21.06.230, to issue an order listing the kinds of insurance that may be place with a nonadmitted insurer that appears on the eligible list published under AS 21.34.050.
2. Under AS 21.34.020(a)(3), producing brokers must make a diligent search of the market to determine whether the insurance is available from an admitted insurer. Due diligence will be presumed if the producing broker affirms that the coverage is on the list.
3. A producing broker may apply for an exception under AS 21.34.020(a)(4) when coverage not on the placement list is available in the admitted market.

Order

For the reasons set out above, the director orders that:

The 2017 surplus lines placement list as presented in Regulatory Order R 17-02 issued on January 27, 2017 will be amended for the change to cyber liability.

The list that follows is the surplus lines placement list to be used until a replacement order is issued.

This order is effective January 8, 2020.

                                                                        Lori Wing-Heier